Irish Home Prices Fall for First Time in More Than a YearDonal Griffin
Irish home prices fell for the first time in more than a year in the fourth quarter as proposed caps on mortgages damped buyer expectations, according to property website Daft.ie.
Asking prices declined by 1 percent from the previous quarter, the first dip since mid-2013, Daft.ie said today in a report. Prices were down 0.7 percent in Dublin, the first quarterly drop since mid-2012, and values were 1.3 percent lower outside the capital, according to the report.
The Central Bank of Ireland in October proposed rules to limit mortgage lending amid concern that values were increasing too quickly as the country recovers from the worst real estate crash in western Europe. Prices soared in Dublin last year amid a shortage of supply.
The central bank, led by governor Patrick Honohan, proposed rules limiting most loans to 80 percent of a property’s value. Some of the nation’s most senior bankers and politicians have criticized the proposals, due to be finalized this month, saying they would hurt first-time buyers.
The bank’s proposals are an “obvious and welcome step in creating a healthy housing market,” Daft analyst Ronan Lyons said in the report. The steps help avert a return to easy credit that helped fuel Ireland’s property bubble in the past, he said.
The central bank may change its proposals this month to introduce the lending limits over several years, the Sunday Times reported yesterday without saying where it got the information.